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Understanding Responsibilities When Starting a New Business

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Dear reader, if you want to start a new business, or you have a friend looking to do it, this guide is perfect for you! We’ll talk about your tax and legal responsibilities! You can also review this as a checklist to ensure nothing is missing in your current company.

Business structures

You need to choose a business structure, it determines which income tax return you’ll file. The most common structures are:

  • Sole proprietorship: unincorporated business, owned by the individual. 
  • Partnership: two or more people do business together. 
  • C-Corporations: Is a business entity separated from its shareholders. B-Corps (for-profits, with a mission) are taxed in the same way!
  • S-Corporations: shareholders pay taxes as individuals.
  • Limited Liability Company (LLC): a type of corporation that protects its shareholders from liabilities in case of bankruptcy.

Apply for Employee Identification Number (EIN)

Your EIN, also known as Federal Tax ID Number identifies you as a Business entity. You’ll need it if:

  • You have employees and/or withhold taxes
  • You operate as a corporation or partnership

Pay your taxes

Here’s the list of taxes paid by businesses, they include:

  • Income tax, including Estimated tax, each Quarter
  • Self-employed tax
  • Employment taxes
  • Excise taxes

Make sure your forms are filed for every tax that applies to your company!

Employee duties

Ensure your employees file the forms:

  • Form I-9 to verify your employee’s identity and employment authorization. 
  • Form W-4 so you as an employer can withhold their federal income tax.

State duties

Check the list of State requirements when opening a business!

Further tasks

If you haven’t added these duties to your business plan, now is the time! Add estimated taxes to your financial statements.

Go to the linked sites to complete anything you’ve missed, after all, nothing is worse than receiving an IRS letter with penalties or audits!

In case you prefer to have an expert guide, IOOGO is here to help you or any Entrepreneur friend!  You can Schedule a Free Consultation and know what’s the best course of action for your business!

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